MONTPELIER — A new “genuine progress indicator” of Vermont’s well-being lagged the more traditional “gross state product” measure of economic activity by more than 40 percent in 2011, a panel of state lawmakers heard Tuesday from economic experts backing the new yardstick.

Experts from the University of Vermont told the Legislature’s Government Accountability Committee that the genuine progress indicator should replace gross state product as a guide to economic policy.

“The GPI does a much better job of measuring overall economic well-being because it deducts the environmental costs of economic activity from the benefits that are produced,” Eric Zencey of UVM’s Gund Institute for Ecological Economics said in a statement.

Vermont passed a law in 2012 saying the state should begin using the new measure as it sets economic policy. Tuesday’s session featured a report on what the GPI looked like for 2011 — the most recent data available — and marked what Rep. Anne O’Brien called “the beginning of the conversation” about how the intent of the 2012 law might be carried out.

The meeting also was a primer — by Zencey and Jon Erickson, dean of UVM’s Rubenstein School of Environment and Natural Resources — on how the GPI works.

Environmental degradation, income inequality, productive work or family time lost as people commute to work — all are counted by the GPI as net drags on the economy, they said, while things like time spent in volunteerism, even as informal as helping an elderly neighbor with chores, factor in as positives.

Vermont is the only state to have passed legislation calling for GPI to be incorporated into the formulation of policies. Maryland’s governor signed an executive order instituting a GPI program there, and several other states are studying GPI as a possible policy tool, they said.

The GPI wasn’t expected to be an easy sale with everyone. William Sayre, an economist, lumber company part owner, radio talk show host and board member of manufacturers’ lobby Associated Industries of Vermont, said he would stick with gross state product as the primary economic indicator.

“With all of its faults the traditional measure at least uses data that we collect on a regular basis and that is produced by transactions in the market,” he said. “We have prices for commodities and services that we buy and sell,” making them more readily calculated, he said.

Sen. Anthony Pollina of Washington County, a strong supporter of the GPI initiative, said he hoped it would “give us a better handle on the impact of our budget decisions.”